The aggregate-demand (AD), short-run aggregate supply (AS), and long-run aggregate-supply (ASLR) schedules for a given economy are as follows. The schedules show the GDP price deflator (P) versus real GDP (Q), with Q measured in trillions of constant dollars.
1. Graph the AD, AS, and ASLR curves. Be sure to label the curves and the axes.
Hint: ASLR is at potential output (Qf).
2. Explain the difference in shape between the AS and ASLR curves in general.